	March 31,			December 31,
	2020			2019
	(In millions)
Debtor-in-Possession Term Facility	$	2,032		$	-
New Term Facility		-			800
Discount on New Term Facility		(37	)		(54	)
Structured equipment financing		35			32
North Ocean 105 construction financing		8			8
Term Facility		-			2,220
10.625% senior notes		-			1,300
Revolving credit facility		-			801
Debt	$	2,038		$	5,107

In connection with the RSA and the Chapter 11 Cases, certain Consenting Parties or their affiliates provided the Debtors with superpriority debtor-in-possession financing pursuant to a new credit agreement (the “DIP Credit Agreement”). The DIP Credit Agreement provides for, among other things, term loans and letters of credit in an aggregate principal amount of up to $2.81 billion, including (1) up to $2,065 million under a term loan facility, consisting of (a) a $550 million tranche made available on January 23, 2020, (b) a $650 million tranche made available upon entry of the Final DIP Order (as defined in the RSA) on February 26, 2020, (c) an $800 million tranche consisting of the principal amount of term loans outstanding under the New Term Facility (defined below) under our Superpriority Credit Agreement (defined below) and $21 million of accrued interest and fees related to term loans outstanding under the New Term Facility under our Superpriority Credit Agreement and the New LC Facility (defined below) under our Superpriority Credit Agreement, in each case that was rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order and (d) a $44 million tranche consisting of the make-whole amount owed to the lenders under our Superpriority Credit Agreement that was rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order (the “DIP Term Facility”) and (2) up to $743 million under a letter of credit facility consisting of (a) $300 million made available at closing on January 23, 2020, (b) $243 million that was made available upon entry of the Final DIP Order on February 26, 2020 and (c) $200 million amount of term loans outstanding under Tranche A and Tranche B of the New LC Facility under our Superpriority Credit Agreement that was rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order (the “DIP LC Facility” and, together with the DIP Term Facility, the “DIP Facilities”). The Final DIP Order was entered by the Bankruptcy Court on February 24, 2020. We intend to use proceeds from the DIP Facilities to, among other things: (1) pay certain fees, interest, payments and expenses related to the Chapter 11 Cases; (2) pay adequate protection payments; (3) fund our working capital needs and expenditures during the Chapter 11 proceedings; (4) fund the Carve-Out (as defined below), which accounts for certain administrative, court and legal fees payable in connection with the Chapter 11 Cases; and (5) pay fees and expenses related to the transactions contemplated by the DIP Facilities.

The make-whole amount of $44 million referred to above was recognized at the accreted value using the effective interest method and was approximately $11 million as of March 31, 2020.

As of March 31, 2020, there was approximately $350 million in aggregate face amount of letters of credit outstanding under the DIP LC Facility.

In the first quarter of 2020, we paid approximately $87 million of fees and expenses related to the establishment of the DIP Credit Agreement, which were recognized in our Statement of Operations for the three months ended March 31, 2020 in the line item “Reorganization items, net.”

All loans outstanding under the DIP Term Facility bear interest at an adjusted LIBOR rate plus 9.00% per annum. All undrawn letters of credit under the DIP LC Facility (other than cash secured letters of credit) bear interest at a rate of 9.00% per annum. During the continuance of an event of default, the outstanding amounts under the DIP Facilities would bear interest at an additional 2.00% per annum above the interest rate otherwise applicable.

The lenders under the DIP Facility, Crédit Agricole Corporate and Investment Bank (“CACIB”), as collateral agent and revolving administrative agent under the DIP Facilities, and Barclays Bank PLC (“Barclays”), as term loan administrative agent under the DIP Term Facility, subject to the Carve-Out (as defined below) and the terms of the Interim DIP Order (as defined in the RSA), at all times: (1) are entitled to joint and several super-priority administrative expense claim status in the Chapter 11 Cases; (2) have a first priority lien on substantially all assets of the Debtors; (3) have a junior lien on any assets of the Debtors subject to a valid, perfected and non-avoidable lien as of the Petition Date, other than such liens securing the obligations under the Credit Agreement, the Superpriority Credit Agreement, the Lloyds’ LC Facility and the 2021 LC Facility; and (4) have a first priority pledge of 100% of the stock and other equity interests in each of McDermott’s direct and indirect subsidiaries. The Debtors’ obligations to the DIP Lenders and the liens and superpriority claims are subject in each case to a carve out (the “Carve-Out”) that accounts for certain administrative, court and legal fees payable in connection with the Chapter 11 Cases.

The DIP Facilities are subject to certain affirmative and negative covenants, including, among other covenants we believe to be customary in debtor-in-possession financings, reporting by the Debtors in the form of a budget and rolling 13-week cash flow forecasts, together with a reasonably detailed written explanation of all material variances from the budget.

Debtor-in-Possession Financial Covenants—The DIP Facilities include the following financial covenants:

•

as of any Variance Testing Date (as defined in the DIP Facilities), we shall not allow (1) our aggregate cumulative actual total receipts for such variance testing period to be less than the projected amount therefor set forth in the most recently delivered Approved Budget (as defined in the DIP Facilities) by more than 15%, (2) our aggregate cumulative actual total disbursements (A) for the variance testing period to exceed the projected amount therefor set forth in the most recently delivered Approved Budget by more than 15% and (B) for each week within such variance testing period, to exceed the projected amount therefor set forth in the most recently delivered Approved Budget by more than (x) 20%, with respect to each of the first week and on a cumulative basis for the two-week period ending with the second week of such variance testing and (y) 15% on a cumulative basis with respect to the three-week period ending with the third week and the four week period ending with the fourth week, in each case of such variance testing period, and (3) our aggregate cumulative actual vendor disbursements and JV infusions with respect to the Specified Projects (as defined in the DIP Facilities) to exceed the projected amount therefore set forth in the most recently delivered Approved Budget by more than 15% for such variance testing period and for each week within such variance testing period by more than (x) 20% with respect to each of the first week and on a cumulative basis for the two-week period ending with the second week of such variance testing and (y) 15% on a cumulative basis with respect to the three-week period ending with the third week and the four week period ending with the fourth week, in each case of such variance testing period.

Test Period End Date		Adjusted EBITDA (In millions)
June 30, 2020	$		230
September 30, 2020			410
December 31, 2020			640

Test Period End Date	Maximum Project Charges (In millions)
December 31, 2019	$	260
March 31, 2020		50
June 30, 2020		50
September 30, 2020		40
December 31, 2020		30

As of March 31, 2020 and December 31, 2019, we were in compliance with our maximum project charges covenant under the DIP Facilities.

The DIP Facilities contain certain events of default we believe to be customary in debtor-in-possession financings, including: (1) conversion of the Chapter 11 Cases to a Chapter 7 case; (2) appointment of a trustee, examiner or receiver in the Chapter 11 Cases; and (3) the final order not being entered by the Bankruptcy Court within 35 days of the interim order relating to the DIP Facilities.

The DIP Facilities will mature on the earliest of (1) nine months after the Petition Date, which date shall be extended automatically by an additional 90 days if certain conditions are satisfied, (2) the Effective Date and (3) the date of acceleration of the obligations under the DIP Facilities following an event of default.

On October 21, 2019, McDermott, as a guarantor, entered into a superpriority senior secured credit agreement (the “Superpriority Credit Agreement”) with three of our wholly owned subsidiaries, McDermott Technology (Americas), Inc. (“MTA”), McDermott Technology (US), Inc. (“MTUS”), and McDermott Technology, B.V. (“MTBV”), as co-borrowers (collectively, the “Borrowers”), a syndicate of lenders and letter of credit issuers, Barclays Bank PLC, as administrative agent for the New Term Facility (as defined below), and Crédit Agricole Corporate and Investment Bank, as administrative agent for the New LC Facility (as defined below).

The Superpriority Credit Agreement provided for borrowings and letters of credit in an aggregate principal amount of $1.7 billion, consisting of (1) a $1.3 billion term loan facility (the “New Term Facility”) and (2) a $400 million letter of credit facility (the “New LC Facility”).

As of December 31, 2019, we had $800 million in borrowings outstanding under the New Term facility and there were $200 million of letters of credit issued (or deemed issued) under the New LC Facility. As discussed in “—Debtor-in-Possession Financing” above, these amounts were rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order.

Certain features within the Superpriority Credit Agreement were identified as embedded derivatives and, therefore, bifurcated as of December 31, 2019. The fair value of the embedded derivatives, which was determined using a discounted cash flow approach, was $60 million as of October 21, 2019. The embedded derivatives were recognized as a reduction to the debt outstanding under the Superpriority Credit Agreement and recorded in accrued liabilities. The reduction of $60 million to the debt is being accreted using the effective interest rate method and was approximately $37 million as of March 31, 2020. The change in the value of the discount of $17 million was recognized in “Interest expense, net” in our Statement of Operations for the three months ended March 31, 2020.

The fair value of the embedded derivatives, re-measured as of March 31, 2020, was de minimis and was $28 million as of December 31, 2019. The impact of the reduction in the fair value of $28 million has been recorded in “Interest expense, net” attributable to our discontinued operations for the three months ended March 31, 2020, as discussed in Note 4, Discontinued Operations.

On May 10, 2018, we entered into a Credit Agreement (as amended to date, the “Credit Agreement”) with a syndicate of lenders and letter of credit issuers, Barclays Bank PLC, as administrative agent for a term facility under the Credit Agreement, and Crédit Agricole

Corporate and Investment Bank, as administrative agent for the other facilities under the Credit Agreement. The Credit Agreement provides for borrowings and letters of credit in the aggregate principal amount of $4.7 billion, consisting of the following:

Term Facility and Revolving Credit Facility post-Petition Date status—As of March 31, 2020, we had $2.2 billion of borrowings outstanding under the Term Facility and $801 million outstanding under the Revolving Credit Facility. The commencement of the Chapter 11 Cases, discussed in Note 2, Basis of Presentation, constituted events of default that accelerated our obligations under the Credit Agreement. However, the ability of the lenders to exercise remedies was stayed upon commencement of the Chapter 11 Cases and continues to be stayed.

In accordance with Plan of Reorganization provisions, the Term Facility and Revolving Credit Facility are subject to compromise as the lenders are projected to receive less than 100% of their claim. Terms of the RSA contemplate equitization of funded debt held by senior secured term lenders for 94% of the reorganized McDermott.

As of March 31, 2020, the Term Facility and Revolving Credit Facility and associated accrued and unpaid interest and allowed claims have been included in “Liabilities subject to compromise” in our Balance Sheet (see Note 3, Reorganization).

Term Facility Letters of Credit, Revolving Credit Facility Letters of Credit and LC Facility post-Petition Date status—As of March 31, 2020, there were approximately $280 million letter of credit (including $55 million of financial letters of credit), $194 million of letters of credit outstanding (including $49 million of financial letters of credit) and approximately $1.146 billion of letters of credit outstanding under the Term Facility Letters of Credit, Revolving Credit Facility and LC facility, respectively.

We are charged a 5% participation fee on any outstanding letter of credit for any newly issued letter of credit and with respect to any increase in the amount of any existing letter of credit. We are also required to pay customary issuance fees and other fees and expenses in connection with the issuance of letters of credit under the Credit Agreement.

Pursuant to the plan of Reorganization, holders of claims under these letter of credit facilities will receive participation rights in the Roll-Off LC Exit Facility (defined in Note 3, Reorganization) or receive their respective pro rata shares of the Secured Creditor Funded Debt Distribution (as defined in the Plan of Reorganization).

On October 30, 2018, we, as a guarantor, entered into a Letter of Credit Agreement (the “Letter of Credit Agreement”) with McDermott Technology (Americas), Inc., McDermott Technology (US), Inc. and McDermott Technology, B.V., each a wholly owned subsidiary of ours, as co-applicants, and Barclays Bank PLC, as administrative agent. The Letter of Credit Agreement provides for a facility for extensions of credit in the form of performance letters of credit in the aggregate face amount of up to $230 million (the “$230 Million LC Facility” or the “2021 LC Facility”). The $230 Million LC Facility is scheduled to expire in December 2021. The

obligations under the Letter of Credit Agreement are unconditionally guaranteed on a senior secured basis by us and substantially all of our wholly owned subsidiaries, other than the co-applicants (which are directly obligated thereunder) and several captive insurance subsidiaries and certain other designated or immaterial subsidiaries. The liens securing the $230 Million LC Facility will rank equal in priority with the liens securing obligations under the Credit Agreement. The Letter of Credit Agreement includes financial and other covenants and provisions relating to events of default that are substantially the same as those in the Credit Agreement. As of March 31, 2020, there were approximately $228 million of letters of credit issued (or deemed issued) under the Letter of Credit Agreement.

Pursuant to the Plan of Reorganization, holders of claims under the Letter of Credit Agreement shall receive participation rights in the Roll-Off LC Exit Facility (defined in Note 3, Reorganization) or receive their respective pro rata shares of the Secured Creditor Funded Debt Distribution (as defined in the Plan of Reorganization).

On April 18, 2018, we issued $1.3 billion in aggregate principal of 10.625% senior notes due 2024 (the “Senior Notes”), pursuant to an indenture we entered into with Wells Fargo Bank, National Association, as trustee. Interest on the Senior Notes was payable semi-annually in arrears, and the Senior Notes were scheduled to mature in May 2024.

The commencement of the Chapter 11 Cases, discussed in Note 2, Basis of Presentation, constituted events of default that accelerated our obligations to Senior Notes holders. However, the ability of the holders to exercise remedies was stayed upon commencement of the Chapter 11 Cases and continues to be stayed. Terms of the RSA contemplate recovery to the holders of the Senior Notes of 6% of the equity of the reorganized McDermott (subject to certain dilution adjustments, such as for the Warrants and the Management Incentive Compensation Plan) and the right to participate in the Rights Offering.

The Senior Notes and the associated accrued and unpaid interest as of the Petition Date have been included in the “Liabilities subject to compromise” in our Balance Sheet as of March 31, 2020.

North Ocean (“NO”) Financing―On September 30, 2010, McDermott International, Inc., as guarantor, and NO 105 AS, one of our subsidiaries, as borrower, entered into a financing agreement to pay a portion of the construction costs of the NO 105. Borrowings under the agreement are secured by, among other things, a pledge of all of the equity of NO 105 AS, a mortgage on the NO 105, and a lien on substantially all of the other assets of NO 105 AS. As of March 31, 2020, the outstanding borrowing under this facility was approximately $8 million and is scheduled to mature in October 2020.

Structured Equipment Financing―In the second quarter of 2019, we entered into a $37 million uncommitted revolving re-invoicing facility for the settlement of certain equipment supplier invoices. As of March 31, 2020, we had approximately $35 million outstanding under this arrangement, with original repayment obligations maturing in January 2020. In March 2020, we entered into an agreement to modify the repayment schedule and expect to settle approximately $5.7 million monthly, beginning June 2020, with full settlement expected in November 2020.

Uncommitted Facilities—We are party to a number of short-term uncommitted bilateral credit facilities and surety bond arrangements (the “Uncommitted Facilities”) across several geographic regions, as follows:

	March 31, 2020				December 31, 2019
	Uncommitted Line Capacity		Utilized		Uncommitted Line Capacity		Utilized
	(In millions)
Bank Guarantee and Bilateral Letter of Credit ⁽¹⁾	$	1,688	$	1,098	$	1,842	$	1,293
Surety Bonds ⁽²⁾		747		625		835		601

The financial institutions that provide the Uncommitted Facilities have no obligation to issue letters of credit or bank guarantees, or to post surety bonds, on our behalf, and they may be able to demand that we provide them with cash or other collateral to backstop these liabilities.